Order of Authorization to Pay Pre-Petition Wages

[Colo_KT]

Colorado

I am owed wages and accrued time by an employer that is in chapter 11. They did not file a first day motion to pay pre-petition wages.

As a creditor (priority unsecured, I assume) am I able to file a motion for order to authorize payment of pre-petition wages or is only the debtor allowed to file this type of motion? Is the order just an authorization or does it compel the employer to pay uncontested wages? Are they required to pay all wages or can they pick and choose?

 

[LdiJ]

Colorado

I am owed wages and accrued time by an employer that is in chapter 11. They did not file a first day motion to pay pre-petition wages.

As a creditor (priority unsecured, I assume) am I able to file a motion for order to authorize payment of pre-petition wages or is only the debtor allowed to file this type of motion? Is the order just an authorization or does it compel the employer to pay uncontested wages? Are they required to pay all wages or can they pick and choose?

Wages have a priority that is higher than other unsecured creditors. Generally the employees are notified that they need to file a claim if they are due wages. However the employer certainly cannot "pick and choose" what wages to pay.

 

[despritfreya]

@Colo_KT

You do not have standing to file the First Day Motion. Such Motions are typically filed because the Debtor-In-Possession wants to keep its employees "happy". Such Motions, while called "First Day", are usually filed within the first week of the filing of the Petition. Only the DIP has standing to seek such an Order and once such an Order is issued, the DIP can pay the pre petition wages. Please note. . . a First Day Motion is not going to ask the Court for permission to pay wages owed to a past employee. It will only cover current employees as such may be necessary to keep operating.

If you are owed wages, those wages incurred within the 180 days prior to the Petition date, up to a certain dollar amount, are "priority" and will need to be paid pursuant to the Chapter 11 Plan. Wages owed for a time period beyond 180 or that which are in excess of the priority amount, are treated as a general unsecured claim and may or may not be paid in full under the Chapter 11 Plan.

Des.

 

[Colo_KT]

So the court has refused the restructuring plan and moved the case to Chapter 7. How does this affect wages owed?

 

[doucar]

You must still file a claim for the unpaid wages. If there is any money after the liquidation of the company, your priority claim could be paid in whole or in part by the Trustee, but only if you file a claim.

 

[Colo_KT]

You must still file a claim for the unpaid wages. If there is any money after the liquidation of the company, your priority claim could be paid in whole or in part by the Trustee, but only if you file a claim.

I submitted the verification of claim with the court for the initial Chapter 11. Do I need to refile?

 

[doucar]

To be on the safe side, yes.